The Indian economic growth
India has had a better performance in its economy. Don't believe me? Try reading the Indian economy in 75 years from NDTV Profit and one of the FUNDAMENTAL components is acceptance of FOREIGN DIRECT INVESTMENT (FDI). Here's a statement from the article I just shared earlier:
Foreign Direct Investment: In the pre-liberalised ‘license raj' India, foreign investment was limited if not non-existent. In 1948, the total foreign investment in India stood at ₹ 256 crore. However, since the 1991 liberalisation, FDI has become the buzzword of India's economic story. In 2020-21, India received a record US$ 81.72 billion in Foreign Direct Investment.
In short, the Indian economy didn't solely develop on the local industry but ALSO by accepting FDI. How did accepting FDI actually HELP INDIA? It's because accepting FDI doesn't defeat the idea of improving the local business environment. It sounds preposterous but the Indian economy opened up and guess what? Did India get run over by foreigners after its independence from Great Britain? Instead, it accepted FDI in 1991 realizing that their independence meant nothing if they can't sustain it. The 1991 liberalization phenomenon led to India's surge as an economic power. Accepting FDI meant the Indian local businesses were given the chance to grow.
Can you imagine if Indians kept getting stuck in the decades-long protectionism since 1948. India was once a country that had its long Indian First Policy.
The late Lee Kuan Yew on India's economics
India didn't get the stuck mindset that it won't work for them because Singapore was "too small". Instead, they decided to follow that role model since 1991 to liberate the economy to a greater extent. Here's an excerpt from Third World to First which should've been learned by Filipinos during the 1990s:
In 1992, Narasimha Rao’s minority Congress government was forced to change India’s economic policies radically to comply with an IMF rescue package. Rao got on well with my prime minister, Goh Chok Tong, when they met at the Non-Aligned conference in Jakarta in 1992, and persuaded him to visit India with a delegation of Singapore businesspeople. His finance minister, Manmohan Singh, and his commerce minister, P. Chidambaram, visited Singapore to brief me on their changes in policy and attract investments from Singaporeans. Both ministers were clear on how to improve India’s economic growth and knew what had to be done. The problem was how to get it done with an opposition that was xenophobic on free enterprise, free markets, foreign trade, and investments.
Rao visited Singapore in September 1994 and discussed India’s opening up with me. The most difficult obstacle, I said, was the mindset of Indian civil servants toward foreigners-that they were out to exploit India and should be hindered. If he wanted foreign investments to flow into India freely, as in China, they must change their mindsets and accept that it was their duty to facilitate, not regulate, the activities of investors. He invited me to visit India for a brainstorming session with his colleagues and his top civil servants. In January 1996, I visited Delhi and spoke to his civil servants at the India International Centre, and also to businesspeople from their three chambers of commerce, on the obstacles that blocked India’s path to higher economic growth. In a separate one-on-one meeting with Rao, he acknowledged that age-old fears of Indians that economic reforms would lead to unequal distribution of wealth had made it difficult for him to proceed with further changes. He had injected large amounts of money to benefit the people but had been accused by his opposition of selling and mortgaging the country. He highlighted two social issues: India’s slow rate of public housing because funds were lacking and its high birth rate. He wanted my prime minister to help him in his housing program. I had to dampen his high expectations that because of our successful housing program we could solve India’s housing problems. Singapore could provide India with planning but they had to raise the resources to implement the plans themselves.
When I met Rao in the 1980s, he was foreign minister in Indira Gandhi’s government. He was of the generation of independence fighters, in his late seventies and on the verge of retirement. When Rajiv Gandhi was assassinated in 1991 in the middle of an election campaign, the Congress Party agreed on Rao as leader. A sympathy vote gave his party the largest number of seats, although short of a majority. Rao became prime minister and for the first two of five years carried out radical economic reforms; but he was not an energetic young man chasing his own ideas. The impetus to the Indian economy came from Manmohan Singh, his finance minister, who ironically had started his career as a central planner. Rao did not have the conviction to persuade the people of India to support these reforms over the heads of an obstructive opposition. With slow economic but high population growth, India is not about to be a wealthy nation for some time. It has to solve its economic and social problems before it can play a major role in Southeast Asia. It is in Asean’s interest to have India grow stronger and help maintain peace and stability on the Indian Ocean side of Southeast Asia.
India is a much bigger country than Singapore. Yet, it was following Singapore in its owy way in terms of basic economics. This should be something to think about that the late Corazon C. Aquino should've paid more attention to. Unfortunately, Cory was fitter to represent the Philippines than to lead it making a parliamentary form of government more feasible. India was once full of people who thought that FDIs are invaders. A radical change in that mindset after years of Indian first policy made it that their parliament was USELESS in the face of Indian first policy.
The Indian community in Singapore were experiencing better lives before than the Indians in Singapore. I guess this caused the meeting between Rao and Lee.
If India can do it then so can the Philippines
India is an even more populous country but it learned from Singapore. We can think of the economic revisions over time against the negative list of the 1987 Constitution. We should think about how, overtime, Fidel V. Ramos up to the late Noynoy Aquino made some amendments to remove certain sectors from the negative list. Noynoy did some improvement in the economy by continuing some of the good policies of Gloria Macapagal-Arroyo, Back then, Mar Roxas also considered removing excessive restrictions back when he was the trade secretary during the time of Joseph Estrada.
However, certain remains of Carlos P. Garcia's lousy "Filipino First Policy" still remain. I think it's really about time to remove the excessive restrictions regarding utilities to lower down the prices of electricity, water, and Internet to accommodate other sectors that have been opened up to. I think the biggest mistake that Ramos up to Noynoy made was not to completely knock out the negative list.
India was once a country with slow economic growth and a high population. The Philippines can get out of it IF it will completely remove any unnecessary restrictions. It would be more than time to educate Filipinos how India's liberalization turned it from a country stuck with decades of slow growth to a fast growing economy.
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